What is considered an acceptable contract with regard to purchasing inventory?


Answer:
Supplier Standard 4 states 'a supplier must fill orders from its own inventory, or must contract with other companies for the purchase of items necessary to fill the order. A supplier may not contract with any entity currently excluded from the Medicare program, any State health care programs, or from any other Federal procurement or non-procurement programs.'

If you do not have inventory, you must have a contract(s) to purchase inventory.

In order for a contract to be considered acceptable, it must contain at a minimum the following elements:

  • Details of the agreement requirements and what type of inventory is being provided
  • Both companies identified in the contract
  • Dates contract is effective - if indefinite, this should be indicated
  • The signatures of both parties

The bottom line is to ensure suppliers have either the inventory or a contract to purchase inventory to support the products and services provided to beneficiaries.

If you have any questions, please contact the NPWest at 866-238-9652 (M-F 10 a.m - 6 p.m. EST) and an analyst will address any questions.


Last Updated: 03/11/2025